PricewaterhouseCoopers Luxembourg presents its results and perspectives for 2009

PricewaterhouseCoopers Luxembourg presents its 2008 results and perspectives for 2009

The leading audit and consulting firm in Luxembourg is releasing its 2008 results and is actively preparing for the next fiscal year, which will be subject to an unprecedented financial crisis.

On October 22, 2008, Didier Mouget, Managing Partner, and the members of the country leadership team of the leading audit and consulting firm in Luxembourg have released the results of PricewaterhouseCoopers for the year ending June 30, 2008.

Notwithstanding the current financial difficulties, PwC runs on optimism. The very good 2008 performances set PwC up to look forward to the challenges of 2009: human resources have increased by 15% and now count 1,800 people; client portfolio includes more than 1,500 new client companies; and finally, turnover has been boosted by 20% to EUR188 million. Such positive results could be a surprise to some. However, in part they can be explained by the fact that Luxembourg has been less and later affected by the financial crisis, and by PwC’s outstanding performance which has confirmed its leadership position in Luxembourg once again.

The growth of PwC Luxembourg is noticeable across all its services, i.e. Audit, Tax, and Advisory, as well as in all the activities of its clients. This year again, activities have considerably increased not only in the financial sector but of the public sector and of Luxembourgish companies, as well. Thus PwC has reinforced its market share in every sector. For example, 45% of investments funds and 34% of banks are audited by PwC, (figures as at December 31, 2007).

2009, the year of danger, yet of opportunities for Luxembourg

“ Despite the current crisis, our positive 2008 results can be explained by last years’ strong efforts and key investments in the development of our activities, and in the promotion of the Luxembourg economy and its financial place abroad, Managing Partner Didier Mouget explains. Commenting on the crisis evolution and consequences, he adds: “ A few weeks ago, the financial market condition and the scale of actions undertaken by most governments to tackle it were still completely unthinkable. This situation, that we must all come to terms with, will radically change the balance, the rules and the functioning of the global financial sector. However, we think that those disruptions could also offer several opportunities for the financial industry, provided that we show perspective and determination. Except for some isolated cases, whose issues took root outside our borders, the banks and other players of the financial place in Luxembourg are very sound. The actions taken by the government and regulatory authorities were swift and efficient and have left intact the level of trust of the market, which is needed for success in the long-term .”

The auditing profession is on top again

In the wake of the previous financial crisis (2001/2002), regulatory constraints were tightened significantly. As a result, the accounting professions reorganised themselves following the adoption of the Sarbanes-Oxley Act in the United States and the Eighth Directive on statutory audits in Europe. “ The implementation of the Eighth Directive in Luxembourg will require that auditors be supervised by a regulator which is independent from the audit profession. This role will be taken on by the CSSF ,” says Deputy Managing Partner and Audit Leader Pascal Rakovsky. “ Auditing professions have been gaining popularity with the public and an increasing number of graduates looking for jobs are attracted to accounting and auditing careers, because they know they will receive hands-on experience ”. As far as audit revenues are concerned, PricewaterhouseCoopers Luxembourg was able to rely on the development of investment funds, including Real Estate and Private Equity funds which performed particularly well. “ While the auditing profession does not seem to be directly threatened by the crisis, one should remain cautiously optimistic about the future. It will all depend on how fast trust will be restored in the markets ,” Pascal Rakovsky concludes.

PwC Luxembourg, 13th largest employer

“ The war for talent constitutes a real challenge in today’s competitive market. We have recruited more than 500 people over the last twelve months, young graduates and senior specialists combined , Human Capital Leader Paul Neyens says. The size of our firm has increased by 15%, and we are now Luxembourg’s 13 ^th largest employer ”. The firm now consists of 1,800 partners and employees and has strengthened its workforce in all departments and business activities: Audit, Advisory, Tax, and its other specialized services, such as Research wherein the Luxembourgish firm is considered as an Excellence centre in Europe for financial services; development with a strong activity in international markets; and Human Resources Management. “ It is capital to invest in human resources to prepare for the future. In this crisis period, we must maintain recruitment, and direct it towards new and promising niches and sectors ,” Paul Neyens adds.

Attracting new companies to Luxembourg

Apart from the financial sector, the Grand Duchy has been able to keep its top-ranked place for the establishment of parent-holding companies and the financing of other international organisations. PwC fully supports the Government’s efforts to develop new sectors (i.e. logistics, e-business, bio-technologies, etc.) or to attract new companies. “ Even if Luxembourg offers a favourable environment for service providers located in the country, and if those companies develop more and more their business activities and presence, the competition is fierce, even in Europe ,” Tax Leader Wim Piot highlights. “ No effort has been spared, but we still need to focus on innovation, on infrastructure developments, including the facilities for expatriates, such as schools, and on communication between the government and the private sector. Those key focus points will allow Luxembourg to keep its leader position despite a weaker global economy .”

Broadening Advisory activities

“ Concerning our Advisory activities, we have been able to balance our activities in financial and non-financial sectors, including our actions towards the public sector and the European Institutions ,” Advisory Leader Luc Henzig explains. International capital markets have again recently proved how volatile they can be; thus it is advisable to broaden our range of services and our geographical horizons. Succession planning services, advising projects that contribute to the region’s economic development in niche sectors, as well as more and more projects with the Great Region forebode prosperous coming years .”

Our management is cautious, yet ambitious

“ When you manage a firm, whose head count has increased from 900 to 1,800 in four years, and which is at the dawn of a new year filled with uncertainty, you need to have a strong vision and strategy, as well as great caution in order to react rapidly ,” Chief Operating Officer Valérie Piastrelli adds. “ We undertake our activities, based on three-year plans developed on the basis of three different scenarios, which are often reviewed, to forecast any market evolutions ”.

Our company is socially responsible

2007 was particularly focussed on socially responsible actions and in 2008, PwC continued this theme. This choice was reinforced by the activity of “My Project” which consists in allocating time to every staff member who would like to be involved in and share his/her skills with a humanitarian project. The “PwC Innovation Awards” also aroused considerable enthusiasm. That internal contest had gathered many CSR (Corporate socially responsible) projects, notably related to environment.

Let’s meet again in 2009

Who could say precisely what the coming months have in store for us financially speaking? “ In such a context, boldness must be combined with caution and perspective with management. Our firm, as well as the whole financial marketplace must trust its capacities and look to the long-term, ” Didier Mouget concludes. “ We intend to keep investing in the long-term because we believe in the future potential of the Luxembourg marketplace .”

Notes to editors

PricewaterhouseCoopers Luxembourg (www.pwc.com/lu) has about 1800 professionals from 49 different countries. PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 154,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

“PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.